Citigroup has started an electronic bond-trading service as Wall Street firms seek to help clients buy and sell debts among themselves.
Bloomberg reports that clients of the Citi Credit Cross trading system have been able to enter transactions themselves since this week, said Scott Helfman, a spokesman for New York-based Citigroup. The service will be phased in during the next few weeks, he said.
Citigroup, Goldman Sachs Group Inc. (GS) and Morgan Stanley are among Wall Street firms that traditionally acted as middlemen by warehousing bonds until customers sought to buy them. That model is changing as U.S. and international rules meant to make the banking system safer have prompted dealers to cut the amount of debt they hold.
The firms now seek to match bond investors with each other to ease trading. Holdings of company debt at the 21 primary dealers that trade with the Federal Reserve shrank 75% to $54.6 billion earlier this month from the end of 2007, according to the central bank.
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